Will all the Courageous Leaders in this place put their hands up?
The #Sanlamgauge report on the progress of Broad Based Black Economic Empowerment act implementation aka transformation and redress in this country, was issued about a month ago and it is good to know that even though there progress is not as it should be, it’s not all grim. You can access the report in the link below https://sanlamgauge.co.za/report-2022/
Firstly South Africa is lauded (not by the report )as having one of the best policy frameworks in the world starting from the constitution and it is not a lie. The BBBEE act is as comprehensive as it gets. I’m no expert but the thing is comprehensive.
The BBBEE Act has 5 components that effectively all companies have to be measured against to determine their BBBEE level.
- Ownership 25% – 35%
- Management and Control – (representation of Black people in leadership) currently over 80% black
- Enterprise and Supplier Development- 80% of procurement should be with BBEEE measured entities, 3% of Net profit after tax should be used for Entreprise Supplier Development
- Skills Development 6,3% of payroll should be used for skills development
- Socio Economic Development – 1% of Net profit after tax
Some of the insights that came from the report are the following
- Most companies are doing well in Ownership and Socioeconomic development – the caveat is that this is only 25-35% of Black ownership stake when the real goal is 51% ownership, some of these deals are employee share schemes which do not participate in strategic decision making of the company and have no real ownership.
- Management and Control
the state is at 77% while listed companies are at 57,8%
- Skills Development – listed entities are at 75,9 % and the state is at 62,9% this is concerning as one of the leading reason (I don’t want to say excuse) companies use for the lack of representation is that there aren’t enough skilled Black people
- Enterprise Supplier development is at 84,92% this doesn’t correlate with the high entrepreneurship failure rate in this country.
- Socioeconomic development is at 101,57% this is great but I wonder how many of those initiatives are sustainable. The enthusiasm for this component is also indicative of the fact that companies are willing to do that which is easy, which is giving but shying away from that which is harder – sharing the power.
A legal framework has limits , what will create real change in this country is courageous leadership. Leaders who are willing to do what is right beyond what is easy as Brene Brown puts it in Dare to lead. The willingness to
- Face our fears and examine the stories we tell ourselves of what it means to share ownership and power, to achieve real transformation
- Move beyond just grudgingly ticking boxes but doing the real, messy, scary personal and collective work that creates psychologically safe corporate cultures.
Will the Courageous Leaders put their hands up?